gallatin carpet

070 points in carpet cleaning is a small, family-owned business operating out of Bozeman, Montana For its services, the company has always charged aflat per square feet of whether The However is about current fee is $22.70 per hundred square feet. there some question the remote company is actually making any money on jobs for some those located on ranches that require considerable travel time. The owners daughter, home for the summer from college, has suggested investigating this question using activity-based costing After some discussion, a simple system consisting of four activity cost pools seemed to be adequate. The activity cost pools and their activity measures appear below. Activity for the Year Activity Measure Activity Cost Pool Square feet cleaned (00s) 10.000 hundred square feet Cleaning carpets 235,000 miles Miles driven Travel to jobs 1,800 jobs Number of jobs Job support Other (costs of idle capacity and Not applicable None organization-sustaining costs) The total cost of operating the company for the year is $361.000, which includes the following costs: 145,000 Wages 33,000 Cleaning supplies Cleaning equipment depreciation 8,000 31,000 Vehicle expenses 64 000 Office expenses 80,000 President's compensation 361,000 Total cost Resource consumption is distributed across the activities as follows Distribution of Resource Consumption Across Activities Cleaning Travel to Job Support Other Total 11% 100% Cleaning supplies 100% 0% 100% Cleaning equipment depreciation 09%, 29% 100% Vehicle expenses 18% 100% Office expenses 60% 100% President's compensation